Hulu And Yahoo Joining Forces To Take On Netflix?

Today it was announced that Hulu would be ending its free TV offerings as the streaming service cozies up to Yahoo for a new joint endeavor.

"For the past couple years, we've been focused on building a subscription service that provides the deepest, most personalized content experience possible to our viewers," Ben Smith, Hulu's Senior VP and Head of Experience, told The Hollywood Reporter. "As we have continued to enhance that offering with new originals, exclusive acquisitions, and movies, the free service became very limited and no longer aligned with the Hulu experience or content strategy."

While this move may irk some die-hard subscribers, it won't change much for casual viewers. Hulu's library of free content isn't overflowing with MUST WATCH exclusive options. Typically, the space is reserved for the five most recent episodes of a handful of shows (ex: America's Got Talent,South Park, Brooklyn Nine-Nine) eight days after they've aired.

What's interesting about this move is that it comes on the heels of Hulu's partnership with Yahoo. The pair have joined to launch a new TV watching site, Yahoo View, that will feature Hulu's content (which is also available through Comcast and other sources) and focus specifically on TV. But that's not all.

Hulu (12 million subscribers) and Yahoo (which shut down Yahoo Screen after just two years) may have realized that they simply can't beat juggernaut Netflix (83 million subscribers) at its own game. As a result, they're trying to create something new.

Yahoo View will be directly linked to the immensely popular social media platform Tumblr (which Yahoo purchased for $1.1 billion). The company will push viewers to blog and re-blog about their favorite shows and offerings. It's a unique approach, especially when you realize Tumblr boasts 550 million monthly users and houses upwards of 280 million blogs. Netflix doesn't have an in-house social media companion that can compete with that type of engagement, though it does generate plenty of buzz of Twitter.

"Community can be really powerful in creating a great service. Yahoo knows that with Tumblr," Jess Lee, Yahoo's Vice President of Lifestyle Products, told Tech Crunch.

But will it really help to close that gap on Netflix? That's doubtful. Despite some disappointing second quarter numbers for Netflix, the streaming service is still growing (1.7 million new subscribers). Hulu is attracting new customers as well, but growth has slowed over the last year. From 2014 to 2015, Hulu added 4.5 million subscribers. From 2015 to 2016, the streaming service added just 3 million. One way to even the playing field would be to make Hulu's content more of a global product. As of now, Hulu is typically only available in the United States, but Yahoo has the capability to expand their sphere of influence.

However, the partnership still won't enable Yahoo View to compete with Netflix's deep stable of existing and original content.

Instead, perhaps Yahoo and Hulu should focus on carving out a smaller niche within the streaming market. Yahoo View can leverage Tumblr's popularity and long reach to entice viewers to stick with them while creating an in-house online community that Netflix can't rival. In that sense, they can use exclusivity as their hook and become a counterpoint to Netflix.

Or, all of these streaming services can continue fighting amongst themselves and cannibalizing one another's audiences.